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Front Page » October 5, 2006 » Local News » PRWID Decides to Raise District Rates
Published 3,292 days ago

PRWID Decides to Raise District Rates

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Sun Advocate reporter

Twin-D Services employees lift a sewer camera from an access point south of Helper. Price River Water Improvement District took over Helper's main line out of the city in August. Since then, the water improvement district has regularly cleaned and had the line filmed. On Tuesday, the PRWID board approved a request from staff to generate an engineering estimate and review options to repair portions of the line and possibly shorten the length between the point where it leaves Helper and where it connects into the district's main line.

The board of directors of the Price River Water Improvement District set a proposed increase on sewer and water rates on Tuesday.

In addition, the board proposed an increase in hauler rates for contractors and others not served by the district's sewer and water system.

Before final approval, the matter has been scheduled for a public hearing in mid November. If approved, the rates could go into affect as early as January 2007.

The public hearing for the matter has been scheduled for Nov. 14.

The district adjusted next month's meeting schedule because the first meeting in November would have been on Election Day.

The second meeting would have been two days before Thanksgiving.

Neither of the options are favorable to members of the public who may wish to attend the meeting.

Next month's meetings have been moved to Nov. 14 and Nov. 28. The public hearing and a regular board meeting will take place on Nov. 14.

In considering the increase, the board considered four different ways to increase water.

In discussions since August, when the board began the process of raising rates, district staff has prepared different scenarios in an effort to determine the best course of action for the board.

Due to the district's current financial position, financial advisers to the district suggested that rates be increased on a scale to generate at least $61,000 more in water revenue.

In adjusting water rates, the district can look at any combination of base rates and overage rates. Each option has its pros and cons.

By increasing the rates for overages, the district impacts high water users more.

However, increasing rates for larger customers encourages conservation. While conservation has certain advantages, lower consumption results in less revenue for the district.

"I just hate banking on over age," said District Manager Phil Palmer, who said that the base rate should cover the known expenses. "I think there are a certain amount of people out there that will become more water-conscious."

If the district looks at increasing the base rate, the rate increase is felt more by lower water users, whose rates increase by a larger percentage. At the same time, every customer pays at least the base rate, so the district can be assured that its revenue needs will be met by raising the base.

The district needs to increase its revenues because it is not keeping sufficient reserves for its bond obligations. Specifically, the bond obligations with the Utah Permanent Community Impact Board are not currently being met by the district. And unless it generates more funds, the district will remain out of compliance.

While the CIB is not likely to take drastic measures to bring the district into compliance, it is not likely that the district will be able to get funding from any resource unless it meets bonding requirements.

In setting its proposed water rate increase, the board settled on a combination of raising the base rate and charging more for overages.

Currently, the base rate for water rate for customers who are connected to the PRWID system and in unincorporated areas of the county, pay $20.84 per month and get 6,000 gallons.

For each additional thousand gallons per month consumed up to 40,000 gallons, customers pay $1.16 per thousand gallons. More than 40,000, users pay $1.45 per thousand gallons until 100,000 gallons, where the overage rate increases to $1.56 per thousand gallons.

Wholesale users, such as Wellington and Spring Glen pay $17.37 as the base rate and pay the same overage rates as retail customers.

For a consumer on the retail PRWID system using an average of 15,000 gallons per month, the average monthly bill is $31.28. A similar consumer on the wholesale system pays an average of $27.81 per month.

A rate study performed on the PRWID water system in 1996 suggested that the average user used just more than 16,000 gallons per month. Secondary water and conservation measures have lowered that to closer to 13,000 gallons per month.

The proposed increase which will be on the table for discussion at the public hearing in November will increase rates for retail and wholesale users.

The board will consider raising the retail base rate to $23 - a $2.16 increase. At the same time, the board will consider raising the wholesale base rate by $2.13 to $19.50.

In the proposed increase, the entire structure has been altered. Instead of cutting off tiers at 6,000, 40,000 and 100,000, the board has proposed tier overage rates at 6,000, 30,000, 60,000 and 100,000.

For overages between 7,000 and 30,000 gallons, the proposed overage rate is $1.50 per thousand gallons.

From 31,000 to 60,000 gallons, the rate is $2 per thousand gallons. From 61,000 to 100,000 gallons the board proposed a rate of $2.50 and above 100,000 gallons the proposed overage rate is $3 per thousand gallons.

Using the proposed tier system, the hardest-hit water users are those using the largest quantities.

For a small household using less than the allotted 6,000 gallons per month, the monthly water bill would increase to $23, a difference of $2.16, and a 10.4 percent increase. A 15,000 gallon retail user would see an increase of $5.22 to $36.50 - an 18.7 percent increase.

Wholesale users would see similar increases. For less than 6,000 gallons, users would see a 12.3 percent increase to $19.50 - a difference of $2.13. At 15,000 gallons, wholesale water rates would increase by $5.19 to $33, an increase of 18.7 percent.

The more heavily impacted users are those using larger quantities.

A retail customer using 75,000 gallons would see their monthly water bill increase from $111.03 to $156.50 - a 41 percent increase. For 150,000 gallons, retail users would see an increase from $225.28 to $369 - an increase of more then 63 percent.

Similar increases would impact wholesale users. For 75,000 gallons, a wholesale customer would see a 43.6 percent increase from $107.56 to $154.50 - a 43.6 percent increase. And a wholesale customer who used 150,000 would pay $367 - a 65.5 percent increase over the $221.81 which would be billed under the current system.

The board estimated that if usage remained unchanged, the new rates would generate $76,000 more per year than the current rates. While this is $15,000 more than what the district needs each year to meet bond obligations, the higher rates will likely encourage conservation - resulting in slightly less than the estimates revenues.

But until the rates go into affect, the PRWID board will not be able to see how much users conserve.

Palmer pointed out to the board that the concept of charging more to large users is a complete turnaround from the philosophy of the water district when it formed in the 1970s. At the time PRWID was created, the philosophy was to provide as much water as users could consume. Palmer said that the change in philosophy wasn't necessarily a bad thing, but that is was a change.

On the matter of sewer rate increases, the district will consider, in conjunction with the water increase, an increase of $3.50 effective in January with an additional $1.50 to be added in 2008. Sewer rates vary around PRWID service area, depending on whether a customer lives in Price, Wellington, Helper or in an unincorporated area. Residents in incorporated areas would see a rate increase in the ballpark of 24 percent. Those in unincorporated areas, who already pay more than those in the cities, would see an percent increase around 14 percent.

The final matter to be discussed at the rate hearing will be a 100 percent increase on hauled sewer rates. This increase would impact homeowners with septic tanks and companies that dump sewage into the PRWID sewer system from sources such as sewage from portable toilets and gray water from mines and contractors.

The hauler rates have not been increased since 1994. In the 12 years that hauler rates have remained unchanged, rates for sewer customers hooked into PRWID's system have doubled.

Doubling the rates will likely have little impact on homeowners with septic tanks. Most septic tanks need to be pumped roughly every 10 years, depending on usage. For a septic tank inside the district, the rate increase would take the hauler fee from $25 to $50. Outside the district, but in Carbon County, the rate would rise from $50 to $100. For septic tanks outside the county, the rate would increase from $75 to $150.

Companies that pay the district's hauler rates on a more frequent basis, such as mines and contractors would see more of an impact. Still, hauler rates fro the district in 2005 did not represent a significant portion of the budget.

The board voted against considering a rate increase affecting impact fees and connection fees, which only apply to new connections to the district's lines. The fees will remain unchanged from current rates.

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